KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
After months of tame inflation, June CPI data is expected to show a shift, thanks to tariff-driven price pressures filtering into the system.
According to Bloomberg’s survey, core CPI (ex-food & energy) likely rose 0.3% month-on-month, the biggest jump in five months. On a yearly basis, core inflation is forecast to tick up to 2.9%, marking the first acceleration since January.
The inflation uptick is a red flag for the Fed — and for rate cut hopes.
Tariffs → Higher Import Costs → Rising Prices
While the pass-through from tariffs remains modest for now, economists warn that this could build gradually over the next quarters, especially if importers continue to pass on costs.
But don’t expect aggressive pricing yet — retailers are facing soft consumer demand and a cooling job market, making it risky to raise prices too quickly.
Consumer Spending Remains Cautious
Retail sales data due Thursday will show how much Americans are holding back:
June retail sales likely saw a mild rebound after two straight declines
Still, the broader trend points to slower growth in Q2
This data matters for GDP forecasts and market expectations.
The Fed’s Dilemma: Inflation vs Growth
The Fed meets July 29–30, and this CPI report will be a key factor in whether they hold or cut rates.
Officials have warned that higher tariffs may stall rate cuts by pushing inflation higher. Yet economic softness could force their hand later this year.
Fed speakers this week — including Waller, Kugler, and Cook — may offer more clues on the direction.
Global Watch: What Else Is Coming
Here’s what global investors should keep an eye on:
🇨🇦 Canada: CPI due ahead of the BoC’s July 30 meeting. Core inflation cooled to 3% in May — will it drop again?
🇯🇵 Japan: Inflation expected to fall to 3.3%, but weak trade and production data signal a broader slowdown.
🇨🇳 China: GDP likely slowed to 5.3%, while new data on trade, consumption, and property may influence sentiment.
🇬🇧 UK: June CPI and labor data will show if inflation is sticky or easing. Governor Andrew Bailey speaks Tuesday.
🇧🇷 Brazil: Slowing output and Trump’s new 50% tariff threats raise risks of a second-half recession.
Investor Takeaways
Inflation is not dead — and tariffs are waking it up.
The Fed is stuck: Weak economy, rising inflation = no easy decision.
Expect more volatility in rate expectations and bond markets.
Watch global data: Asia and Europe’s reports may set the tone for risk sentiment.
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